The Most Serious Recent Challenge to the EU Has Been

question 50

Multiple Choice

The most serious recent challenge to the EU has been:

• A) the recent financial crisis.
• B) the arrest of the IMF's Strauss-Kahn.
• C) immigration-provoked social unrest.
• D) weather changes that have resulted in rising sea levels and warmer temperatures.

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Definitions:

M&M Proposition I

Modigliani and Miller Proposition I states that under certain market conditions (no taxes, no bankruptcy costs), the value of a firm is not affected by how it is financed, whether by debt or equity.

Static Theory

Static Theory refers to economic theories or models that do not account for changes in the economy over time, analyzing a fixed point instead.

Interest Tax Shield

The decrease in income tax owed that occurs when interest payments on borrowed funds are subtracted from taxable income.